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Homework Answers
C - $3,45,643.60
Selling price if yield is 4%
Present value of annuity= interest * PVF(r,n)
= 12,000*PVF(4,20)
= 12,000*13.5903
= $163,083.6
Present value of the bond on date of maturity
= 400,000*(1.04)^20
=400,000*0.4564
=$182,560
Sale price of bond= PV of annuity of bond+ PV of bond
= $163,083.70+182,560
=$ 345,643.60
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